Many commodities
found succour in Chinese data showing a stronger-than-expected rise in both
exports and imports last month, boosting the country's trade surplus to
elevated levels.

The CRB
commodities index added 0.5% to close at its highest in nearly five months, and
share markets were generally pretty solid too, although Wall Street's Dow Jones
Industrial Average stood 0.2% lower in late deals.

However, grains and oilseeds were not among them.

Chinese u-turn

Indeed, these markets were overshadowed by some negative
news on Chinese imports – confirmation, at long last, of cancellations of orders
of US soybeans, now the Brazilian harvest is throwing off supplies at lower
prices.

The cancellations amounted to 272,000 tonnes, although there
was an accompanying purchase of 240,000 tonnes for 2014-15, making it looks
like the order had been rolled over.

The talk has been of Chinese buyers ditching far higher
volumes, with 10-12 cargoes, more like 500,000 tonnes, said by the rumour mill
to have been axed.

But there is counter speculation too that merchants are not
letting importers off the hook so easily over the US purchases.

Waited too long?

"There has been talk in the market that Chinese buyers may
have waited too long to cancel contracts or shift to South American origins on
nearby contract, as US exporters have already booked freight for loading at US
ports," said Anne Frick at broker Jefferies Bache.

But although there "appears to be some difficulty and hesitation
on shifting to South American origins, it will eventually take place.

"Switching to South America is an annual process, with the
discount in South American values versus US making the decision easy for
exporters."

Indeed, Brazil has begun shipping new crop soybeans "ahead
of normal, though end users will be cautious before shifting all of their
origination to South America", given the history of logistical problems and
strikes.

'Earlier and larger cancellations'

Richard Feltes, at RJ O'Brien, termed Brazil's February
soybean exports as "stellar" so far, indicating that volumes may hit 3.0m
tonnes, up from 2.3m tonnes in February last year.

"Rains in southern and north western areas will improve
moisture for safrinha corn and late
soybean growth," if slowing harvest of main crop corn and earlier harvested
soybeans, weather service MDA said.

US warms up

In the US, weather improvement meant a retreat in the
freezing temperatures which have hampered logistics, encouraging buyers to pay
up for short-term supplies of grains as well as soybeans.

"In the upper Midwest, things appear to be returning to
normal with temperatures this morning in many areas above zero for the first
time in many weeks, while the 10-day forecast is advertising temperatures above
freezing," Benson Quinn Commodities said.

Still, the news was not all bearish, with CHS Hedging noting
that "demand for soybeans remains strong at the processor".

Soybeans for March fell in Chicago, but by a relatively
modest 0.8% to $13.23 a bushel.

Oats plunge

The improved US weather was a negative for many grains too,
of which prices have also had some support from logistical problems.

Oats, which hit
record highs last week, has been chief among these, and indeed the March
contract plunged 4.3% to $4.18 ½ a bushel, narrowly avoiding a limit-down
close.

Corn suffered a
less precipitate drop, by 0.4% to $4.40 a bushel for March delivery, surrendering
its 10-day moving average, but keeping just ahead of the 100-day line.

CHS noted that "the dry and warmer than normal weather has
allowed for quick planting" of the safrinha corn crop, planted on land vacated
by the soybean harvest, "but ground moisture is lacking for newly planted seeds".

And fund positioning is not as supportive as it was either.

"Funds are now sitting on a neutral-to-long position, having
covered the majority of a rather substantial short position over the past two
week," Benson Quinn Commodities said.

That is "offering stiff resistance" to upward movement "as
funds are now longer a big buyer in the corn market".

'Begin to thaw'

Wheat fared even
worse, with the warmer US weather not only reducing the freeze risk to winter
wheat seedlings, but melting snow to replenish soil moisture.

"Plains snow cover should continue to melt through next
week, as precipitation remains limited and temperatures warm," MDA said.

"The recent cold push is expected to end today and begin to
thaw the southern states cover," CHS said, if noting that "more snow is
forecasted for western Kansas at the end of the week".

Still, Kansas is dry, and could do with more soil moisture.

Price moves

In Chicago, wheat for March kissed its 50-day moving average
for the first time in three months, only to lack the momentum to move through
it, itself a poor technical sign.

The contract closed down 0.7% at $5.87 a bushel.

Paris wheat for March, which lagged Chicago during the
recent rally, dawdled on the downside too, ending unchanged at E195.75 a tonne.

Although FranceAgriMer did raise its estimate for French wheat
stocks at the close of 2013-14, by 170,000 tonne to 2.68m tonnes, some had
expected a bigger increase, with the official crop bureau stopping short of cutting
the forecast for exports outside the EU, as investors had prepared for.

London feed wheat for March dropped 1.2% to £151.70 a tonne,
undermined by data showing surprisingly robust UK imports, of corn as well as
wheat itself.

El Nino worries

Among soft commodities, cocoa
hit two year highs on both sides of the Atlantic as talk of an El Nino in the
offing gained momentum.

El Ninos have a habit of sapping world cocoa output,
bringing excessive rain to Ecuador, a major producer, while tending to bring
dry weather to West Africa, the most importing growing region.

"Forecast models increasingly lean toward the development of
El Nino this summer and fall," said Mark Welch at Texas A&M University.

Cocoa for May closed up 0.7% at £1,867 a tonne in London, after
touching £1,871 a tonne earlier, while its New York peer gained 1.3% to $2,971
a tonne, $3 below its own two-year top.

Coffee bubbles

And arabica coffee rose
even more, by 2.7% to 141.15 cents a pound for New York's May contract, now the
best traded.

The rise was attributed to ideas that the Brazilian dryness,
while fading, had already wrought substantial damage.